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To: Robert Rose who wrote (100112)	4/12/2000 2:15:00 PM
From: H James Morris	Read Replies (2) \| Respond to of 164684

Robert, On a more serious note...I'm concerned about Msft. I know Rick Sherlund...I met him years ago when Msft first went public. I have a call into him...all my Msft shares kept at Goldman. Hedged but concerned. My ex-wife and my daughters shares aren't.:-(( > New York, April 12 (Bloomberg) -- When Bill Gates and Paul Allen first sold shares in their software company to the public in 1986, they hired Goldman, Sachs & Co. to arrange the sale. And Goldman assigned analyst Rick Sherlund to follow the newly public Microsoft Corp. Sherlund still follows the world's largest software company for Goldman. That long relationship and the quality of his research mean the 45-year-old Sherlund is the analyst investors must listen to on Microsoft, money managers say. Microsoft shares fell as much as 5.8 percent today after Sherlund cut his fiscal third-quarter revenue estimate for the company, saying corporate purchases of personal computers weren't as strong as forecast. ``Rick's the axe on Microsoft and has been for the last 15 years,' said Phil Orlando, chief investment officer for Value Line Asset Management Inc., which owns Microsoft shares. ``He's a brilliant analyst who perhaps gets access' that others don't. Gates in the past regularly invited Sherlund for one-on-one dinners, said Orlando. Sherlund downplays that relationship. ``Bill's a lot harder to have dinner with than he was a few years ago,' Sherlund said. ``I haven't had that privilege in a while. I'm going through the same channels as everyone else. I may be closer to some stories because I focus more on this company than other analysts.' Sherlund, who joined Goldman 18 years ago after working at consultant Arthur Andersen LLC, has a history of market-moving calls on Microsoft, the fourth-largest company in the U.S. by market value. Goldman's investment-banking relationship hasn't deterred the firm from making negative calls. Negative Calls In September 1997, Sherlund said Microsoft would delay the release of Windows 98, and the stock slid as much as 5.3 percent. In November 1995 the stock dropped 4.5 percent after Sherlund reduced his rating on Microsoft and took it off the firm's recommended list, citing the ``serious threat' from Internet software companies. That turned out to be the wrong call. By the time Sherlund reinstated Microsoft to the recommended list five months later, the shares had risen 22 percent versus an 8.9 percent rise in the Standard & Poor's 500 Index and 12 percent rise in the S&P Computer Software Index. Today, he kept his earnings estimates and ``recommend list' rating unchanged. PC demand was slow from November through February, Sherlund said. ``We had hoped that March would be strong enough to make up for the weakness in January and February during his quarter, but it doesn't appear that it has rebounded as quickly,' he told Bloomberg Television. Microsoft's third-quarter revenue is likely to be $5.75 billion, 3 percent lower than his prior estimate of $5.95 billion, Sherlund said. Sherlund's view on PC demand runs counter to the word from other analysts, said Orlando, who didn't sell any of his Microsoft shares because of Sherlund's comments. He said, ``Rick may be out there on his own on this one.' Apr/12/2000 12:22